Buggy Whips Not The Perfect Analogy Of Businesses Disrupted By Innovation?

from the uh,-no... dept

A bunch of folks have sent in Randall Stross' latest silly feature piece in the NY Times claiming that the classic use of the "buggy whip" as an example of an industry put out of business due to a changing marketplace is inaccurate. But, that's not what the article actually shows. Oddly, the article barely discusses buggy whips at all, other than to say that other suppliers of horse-and-buggy parts did adapt and did change. In fact, the article highlights that many companies that were smart enough to adapt did fine:

There were 13,000 businesses in the wagon and carriage industry in 1890, Mr. Kinney said. A company survived not by conceiving of itself as being in the "personal transportation" business, but by commanding technological expertise relevant to the automobile, he said. "The people who made the most successful transition were not the carriage makers, but the carriage parts makers," he said, some of whom are still in business.

One is the giant Timken Company, whose signature products, roller bearings, were first used in wagon wheels in the 1890s. They easily adapted to the automobile because they could be applied "to nearly anything that moved," Mr. Kinney wrote.

But that proves the point exactly (and goes directly against what Stross seems to think it says). Those companies, like Timken, that didn't limit themselves by the exact final product, did fine. They recognized that the end market was changing and worked to make sure that the products they offered made sense in the new markets as well as the old. The buggy whip makers, on the other hand, didn't do that. That's exactly the point of the buggy whip analogy and it seems to be supported by this claim. No one said that it was impossible for companies to adapt -- and the examples of companies like Timken, prove that. The problem was for the firms that didn't do this... like the buggy whip makers.

The article also claims that many of the carriage makers did, in fact, try to make the shift from carriage making to automaking, with Studebaker Brothers Manufacturing Company being the most successful, before eventually going out of business. But, again, this misses the point of the story. The argument isn't that companies can't adapt, but that they will often be held back by legacy issues. Just look at the music industry and how it attempted to "adapt" to the online world by launching ridiculous music services that no one used like MusicNet and PressPlay years back. But, the vast majority of carriage makers were greatly hindered by their legacy business. The story of William Durant -- who founded both General Motors and Chevrolet -- is instructive (but makes no appearance in the Stross article). He worked for a carriage maker, and was one who spoke out against cars as being "smelly, noisy and dangerous." But when he realized that the world was moving towards them, and that his current company wouldn't be able to adapt due to legacy issues, he jumped ship to Buick.

So while Stross' story is entertaining, it doesn't seem to prove the point it set out to make, and does quite the opposite. It declares that "buggy whip makers never had a fighting chance" to adapt, but does nothing to support that claim, other than pointing to the fact that others did adapt. That doesn't prove the point. It just shows that adaptation was possible and that the buggy whip makers didn't do it. Whether or not they could have remains an open question.

Did you read the article? It sounds like to me he was calling out newspapers. He said that companies can survive by listening to consumer's wants. Someone agrees with you, Mike, and you scream them down. What is your deal?

Re:

Did YOU read the article? It starts and ends with the author claiming that "Buggy Whip Makers" is a poor analogy for what happened to those who failed to innovate from the age of carriage to car.

Plain, simple, and wrong.

Simple fact is, the BWMs thought that they made whips. What they really did was make devices that sped up a vehicle, and in the larger sense, they made accessories for vehicles that were made out of wood (presumably) and leather.

Admitting the assumption that they probably weren't going to get into the business of manufacturing accelerator pedals, they certainly could have retooled for, oh I dunno...

More to the point...

Whether or not they could have remains an open question.

I would say the question is, whether they could adapt or couldn't so what? What difference does it make if an company/industry can adapt? If they do, great for them. If they don't, great for others. In the end, the adaptation will occur regardless of who does it.

Re: More to the point...

You ask "so what". There are two things that are relevant today (and at any time):

1. companies that ignore their changing environments hurt themselves, their employees, their suppliers and likely their customers by not being leaders into the future of their business but by leading all these entities down into the tar pits of their industries

2. companies in such a situation usually try to take others down with them by blocking legitimate advances in the competing fields that are superseding them. Often these new fields are fledgling and so susceptible. This means the dying company is causing a lot of collateral damage.

There's some good in the article

I think that the subject article makes some good points (although it maybe overstates its case a little). The point they are trying to make is that adapting was harder for buggy whip makers because the skill set they possessed ("braiding fiber around a hard core") didn't have an application in the automobile business. The carriage makers were closer, with mostly woodworking skills, while the carriage part makers were the closest, since many of them already had metalworking skills.

This isn't to say that a particular industry can't adapt. I take issue with the article's final statement: "But the buggy whip makers never had a fighting chance." In fact the article contradicts itself, as it mentions that a few whip makers survived by focusing on the equestrian market (polo, horse racing, etc.)

There's a saying "to a man with a hammer, everything looks like a nail." Humans have a tendency to try to solve problems with the skills and tools they already have rather than learning new ones. It takes an exceptional person to 1) recognize that their skills and tools are losing relevance, and 2) acquire new skills and tools to make a successful transition.

This is just my interpretation, but I think the point of the article is not that buggy whip makers aren't a good example of businesses disrupted by innovation. The point is rather that for most businesses, the carriage makers and carriage part makers are more apt analogies. Most modern businesses facing disruption have some (but not all) of the skills they will need for the future.

Re: There's some good in the article

It also brings to mind a very good question: How many of the buggy whip company owners went on to have other successful businesses? Just because "Bob's Buggy Whips" didn't become "Bob's Horseless Carriage Hood Ornaments" doesn't mean that they all went broke and turned to panhandling.

I think you are correct, their skill set wasn't at all something that would be in demand for the new fangled automobile, there is nothing to whip. Perhaps they moves to other businesses (like say seat covers or similar) under other company names and guises, maybe selling out their whip companies before moving on.

I know where Mike is going when he does his "buggy whip" thing, but there is little proof that the owners of these companies didn't move on to other successful businesses.

Re: Re: There's some good in the article

'I think you are correct, their skill set wasn't at all something that would be in demand for the new fangled automobile, there is nothing to whip.'

I can actually address this. Buggy whips are made out of... leather... The fact that other goods can similarly be made out of leather should be a good indicator that there was still a huge market for their expertise. Just not for /whips/. Unless you're into that sort of thing, anyways. That such companies still went out of business is rather telling. And it's also a good indication of what's going to happen to the recording industry. Bye bye, RIAA!

Re: Re: Re: There's some good in the article

Mike uses the "buggy whip" thing as if every buggy whip company owner just turned turtle and baked in the sun. He looks at a buggy whip company going out of business as a fail, when in fact it may just be closing company A to move on to being company B (going from Bob's Buggy Whips to Bob's Horseless Carriage Seats... who knows?).

There is little conclusive evidence, yet them buggy whip guys are held up like the dumbest SOBs in business history. It's funny as heck.

bill field

All this makes me think of Kodak. They could have tried for taxes on digital cameras, or stuff like that. Instead, they are rebuilding successfully in that area. Almost all the camera makers (including Polaroid, which was IMHO the most affected by the instant gratification of the digital world) seem to be adapting perfectly fine to this new world.

I think the problem with the failure of companies to evolve is that they don't really know what their business is. In the little town I come from there were several very successful cast iron foundries, one of which made really beautiful and very long-lived cast iron fences. When less expensive welded steel fencing began to erode his business, his went gradually downhill to failure. Why? Because he didn't realize that his business was not fences, per se -- he had learned how to make large, intricately detailed iron castings that didn't warp as they cooled (rather tricky) and so didn't pursue any other business that required this expertise. At the time, there were quite a few and he just didn't see them. He was a fence maker.

I think the problem with the failure of companies to evolve is that they don't really know what their business is. In the little town I come from there were several very successful cast iron foundries, one of which made really beautiful and very long-lived cast iron fences. When less expensive welded steel fencing began to erode his business, his went gradually downhill to failure. Why? Because he didn't realize that his business was not fences, per se -- he had learned how to make large, intricately detailed iron castings that didn't warp as they cooled (rather tricky) and so didn't pursue any other business that required this expertise. At the time, there were quite a few and he just didn't see them. He was a fence maker.

here is the deal. IMHO

I saw a slightly different message in his article which is a perfect slimily of the music industry. Is that the buggy industry thought its job was producing buggy whips. Where the music industry wrongly thinks its money is made due to Intellectual Property.

A buggy whip was the gas pedal of the horse. Instead of seeing themselves as a product, they should have focused on the service they delivered.
The music industry thinks it is a product, which is why they have focused so much on protecting the product. They are in fact an entertainment distribution and facilitation company. Without their distribution network, they would make nothing. They need to quit thinking about the distribution of plastic, and change their model to bits. If they make the most secure, efficient and profitable distro network they will be able to survive. When napster came, they should not have destroyed it, but bought it.

They keep screaming, think of the artist. I can't tell you how many times, I hear the artist has gotten ripped. They just had a one hit wonder show on VH1. The lady who made black velvet basically claimed she never saw any money for it. Without the artist they are nothing, without people buying the artists product they are nothing. They need to focus on the service they deliver, and move it from a physical model to one of moving bits. I think they are too late, now torrent rules and it is a snake with many heads.

Re: here is the deal. IMHO

They need to quit thinking about the distribution of plastic, and change their model to bits. If they make the most secure, efficient and profitable distro network they will be able to survive.

Even just distributing bits may not be enough. If they make their bits available for cheap, and easy, and DRM-free, they'll sell. But they could make even more money by defining themselves as promoters/agents/marketers for the artists, rather than distributers of music. Distribution is really really easy and cheap now - not a good place to build your core business. You want the business to be based on something others can't easily do for themselves, and distribution doesn't fit that description.

Re: here is the deal. IMHO

They need to quit thinking about the distribution of plastic, and change their model to bits.

Even that, IMO, is way to narrowly focused. If the labels believe they are in the music delivery business, then they will fail simply because peer-to-peer needs no middle man.

Labels should be focusing on their areas of expertise such as relationship development, marketing, production assistance, etc. They could then venture into other related avenues such as tour management, tour hosting, special events coordination, etc.

The beauty of the internet. People write stupid stuff, spew crap without real facts to back it up, google picks it up and users read it. Ahhh, will my time on the throne is up. Got to go. Too bad this is not in paper form. I could use it!

Leather Manufacturer, Goods Producer, Khawaja Tanneries.

Khawaja Tanneries PakistanWe are specialized in producing excellent varieties in COW & BUFFALO and enjoying 1.5 Million production capacity per month in Square Feet.Khawaja Tanneries is ranked amongst the most modern production units of Pakistan. The Tannery is being run by highly qualified technicians with the latest and most advanced technologies (mainly European), which is regarded the world over. Strict quality control is one of the company’s most important principles.Through time, our business has gradually broadened towards the various countries world-wide such asChina, India, Vietnam, Thailand, Russia, Indonesia, Malaysia, Japan, USA, South Korea, Taiwan, Italy, France, Spain, Poland, South Africa,Germany and many other countries around the world. The company places maximum emphasis on product quality, product innovation with the bestprocessing facilities, and run SAP for inventory & management controls. We also have developed quality standardization and remarkable servicelevel to ensure complete customer satisfaction.Khawaja Tanneries Pakistan